Page 154 - Trump University Commercial Real Estate 101

TRUMP UNIVERSITY COMMERCIAL REAL ESTATE 101

Setting Up the Closing

When is the best time to close on your property? There are two
schools of thought: Some investors like to close late in the month so
they have less pre - paid interest to deal with.
I like to close at the beginning of the month. The seller is responsi-
ble for giving you all of the rent owed for the remainder of that almost -
full month. If you close on the third of the month, the seller will owe
you 27 days of rent from each tenant, whether he ’ s collected it or not.
This money can come in handy if you are tight on funds going
into the closing. The drawback is that you ’ ll have more prepaid inter-
est to pay on your loan. In my experience, the amount of rent is much
higher than the amount of prepaid interest. Close early when you have
the choice.
One extra benefit with commercial properties is that you don ’ t

need to go the city in which the property is located in order to close
the deal. The escrow agent will send you a copy of the buyer ’ s closing
statement for your review. If you ’ re okay with it, you sign and return
it. If not, you make the necessary changes.
Be sure you read this document closely and focus on the prora-
tions. Those are items such as taxes that must be paid by the seller up
to a certain date, at which point you take them over. The same is true
with rental income, as I mentioned before. Quite often there will be a
mistake in the proration section. What a surprise: The mistake is
almost never in your favor. If you do not detect the mistake, you
eat it.
The escrow agent will also send you a copy of the closing docu-
ments. Immediately send these to your attorney for review. Now is the

time to find and fix any discrepancies. Once the attorney gives the okay,
you sign all the documents in front of a notary public and send them to
the escrow agent. You can find notaries in the phone book, and at many

insurance companies, mortgage broker offi ces, and banks.
While you ’ re pushing all this paper, the seller is doing the same.
All parties usually sign and send the documents back to the escrow

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